SpaceX (SPCX)

By both methods, the value today (DCF $39 · Multiples $53) is below the market price ($163).

Today — expensive, no margin of safety: at $163 trades ~209.0% above its value discounted to today (~$53); the expected return does not even reach the risk-free rate (4.5%).

At 5 years — Sobrevalorado: the expected total return is negative — the price already discounts a demanding scenario that, if not met, results in a loss.

The bridge: the return at 5 years falls below the risk-free rate (4.5%) — which is why there is not even a discount to today's value. To require a 15% annual return, it would need to be bought at ~$33.

Educational / informational. Does not constitute investment advice.

The inverse approach: instead of projecting growth to obtain the value, the market price ($163) is taken as given and it solves for what annual owner-earnings growth would need to hold for 5 years for the present value —at the method's rate (4.5%, no-growth terminal)— to equal that price. It is the disconfirmation test: the expectations the price already pays for, contrasted against the method's projection.

The price discounts growth (65.0%/year) above our base case (20.0%/year) → it is priced for a demanding scenario and leaves little cushion against a slowdown.

That growth implies ~$105.7 bn of owner earnings in year 5 (vs ~$21.5 bn of our base case). It recalculates if the DCF assumptions are edited.

Year-by-year projection of the selected scenario. From each year, two versions of the flow are derived: growth FCF (operating flow − total capex, the cash surplus) and maintenance FCF (the owner earnings: what the business yields if it only sustains its capacity). The flow is returned almost in full (dividend + buyback) or redeployed into the operation, so that EV stays roughly flat and multiples compress because the metric grows, not because of cash accumulation. The valuation is done on EV/Adj EBITDA. In edit mode, revenue, margins, capex, and exit multiples can be adjusted.

Rolling grid over the TTM as of Jun 30, 2026, the first window with quarters presented: SpaceX went public in June 2026 and its Aug 4 10-Q allows the twelve months to be built by levels (fiscal 2025 from the S-1 + first half 2026 − first half 2025), so the base year is no longer the last fiscal year. Revenue US$23.0bn and adjusted EBITDA US$8.3bn. In an investment phase: consolidated free cash flow is −US$32.3bn (operating cash flow US$9.9bn against capex of US$42.2bn, more than double the prior fiscal year on data centers for the artificial intelligence segment), so there are no positive owner earnings and it is valued on enterprise value over adjusted EBITDA, the metric of its sum of the parts. That burn is the figure that governs the case: the June offering and notes left US$100.0bn of cash and investments against US$38.4bn of debt, and at the current pace that surplus funds roughly three years of deployment. Connectivity is the engine of the result (62% EBITDA margin and the only segment generating cash); Space enters with slightly negative EBITDA and AI only crosses to positive within the horizon. The projection is built by segment and summed. The terminal multiple (18.9×) is derived from the sum of the parts (enterprise value US$805bn ÷ terminal EBITDA US$42.7bn). The adverse scenario starts below the current pace, as befits a stress test. Mars, the lunar economy, and orbital data centers are neither quantified nor paid for.

Today's elevated multiple is the price of growth: if the business grows, the entry point cheapens on its own going forward (the metric grows while EV stays roughly flat). The exit multiple at 3 years is higher than the terminal at 5 years —at 3 years there is more growth still ahead—, so the value curve shows whether value creation is concentrated in the early or the later years. The required return is applied to the base scenario.

They are valued separately, with their own rationale, and are not incorporated into the base or the verdict (they are excess return). When assigning them value — in Editmode —, the total with optionalities updates live, without moving the base.

The verdict, the base CAGR, and the margin of safety are always calculated on the base; optionalities do not alter them (with optionalities at $0 they do not move).

Each card fixes a required annual return and answers: if the business is worth $66 in 5 years, what is the maximum that can be paid today to obtain that return? Since it now trades at $163, the margin of safety is how much cheaper the market is than that maximum. The three thresholds: 4% covers inflation (the floor), 10% is the long-term average return, and 15% is the level of a great investment.

With a target price of $66 in 5 years and a required return of 4.5% annually, the maximum to pay today is $53. Against the current market price ($163), the margin of safety is -209.0% (trades above the maximum → a premium is paid) and the total return at that price would be -16.6% annually.

• Extreme entry multiple. At $163 the entry multiple on sales is 110× and on adjusted EBITDA —the metric that drives the valuation— 252× — it holds only if all three pieces execute without stumbles for years.
• Sum of the parts by piece (the correct method). Each segment is valued on EV/EBITDA, the metric a business with negative consolidated FCF requires; the resulting operating value falls well short of the price in all three scenarios.
• No margin of safety. The base CAGR at market price (-17%) is negative: it falls even below the risk-free rate, with no discount at all on today's value. The verdict is Overvalued.
• The multiple compresses, but from very high. With the price fixed and the metric growing, the multiple goes from 252× today to 49× over five years — it makes the entry cheaper, but from an extreme level.
• Optionalities kept separate, unpaid. Mars, the lunar economy, and orbital data centers are excluded from the base case for not being quantifiable; correctly, no value is assigned to them, even though the market price appears to price in some of it anyway.

• ✕ ROIC exceeds the cost of capital (~10%)
• ✓ High incremental ROIC (compounding)
• ✕ CFROIC backs up the ROIC (0%, cash vs. accruals)
• ✓ Healthy balance sheet (low corporate debt)
• ✓ Durable competitive moat (multiple advantages)

• Strong, predictable cash generation. The opposite today: consolidated free cash flow is −US$32.3bn because deployment capex (US$42.2bn) quadruples adjusted EBITDA (US$8.3bn). Connectivity already generates cash, but its contribution is reinvested in the constellation and in the artificial intelligence segment's data centers.
• ROIC / CFROIC. Both negative at the consolidated level due to the investment phase; incremental ROIC (~12%) is the encouraging signal — if it holds above the cost of capital, today's investment creates tomorrow's value.
• Starlink standalone, already profitable. The connectivity segment operates at a 63% EBITDA margin — evidence that, once constellation capex is amortized, the business generates real cash.
• Reinvestment runway. Enormous: Starlink expansion (from 10.3M toward 40-60M subscribers in the base case), Starship, and AI compute contracted years out. The risk isn't a lack of opportunities, it's funding them.
• Distortions to watch. Adj EBITDA excludes deployment capex; it should always be compared against consolidated FCF (negative) to avoid confusing the adjusted metric with real cash.

Annual levels from the official filing (10-K); the % over each bar is the year-over-year (YoY) growth vs the prior year.

Starlink is the growth engine and monetizes as subscribers × average monthly revenue per subscriber: the base went from 6.0 to 12.0 million in twelve months while that revenue fell from US$85 to US$66 per month, a deliberate decline as international penetration and lower-price plans expanded, more than offset by volume. Deployment leverages launch capacity, which also sustains the proprietary constellation without recognizing inter-segment revenue; customer launches fell from 21 to 17 in the half-year, which explains why Space's revenue declined. The third engine is compute: installed capacity rose from 0.4 to 1.4 gigawatts and drove the artificial intelligence segment's revenue from US$1.5bn to US$3.4bn in the half-year. The group operates in an investment phase: trailing-twelve-month revenue reached US$23.0bn, but capex reached US$42.2bn and net income remains negative while the infrastructure is deployed.

The % are the annual (year-over-year) growth: each year —historical and projected— vs the prior one; the TTM (trailing 12m) vs the TTM of a year ago, to avoid overlapping windows. The historicals are exact figures from the official filings; the projected years come from the year-by-year model (the intermediate years without their own series are interpolated between the anchors). The projected columns (+1y…+5y) are 12-month windows counted from the TTM close (30-jun-2026): the projection starts from the most recently reported data, not the fiscal year. The projected base is realistic and unbiased — the risk discount is applied at the end, via the required return. The rationale for each metric is in the (i).

• Real, volume-driven growth. Total revenue grew 33% in FY2025 driven by volume: Starlink revenue +50% driven by subscriber growth (not price, which is actually declining) and a launch cadence that rose from 98 to 170 per year in two years (+23% in the latest).
• Where the engine comes from. Starlink accounts for ~61% of revenue and the fastest growth (+50%); Space contributes ~22% with slower growth (~8%, and most of its value is internal); AI is just ~17% but the piece with the most uncertainty.
• AI — the most uncertain. xAI revenue grew 23% but the segment is still burning cash operationally; the base case projects a large step-up supported by contracted compute (~US$26bn/year) that hasn't yet translated into profitability.
• Capital cycle / competition. Capital is flooding into the sector (Kuiper, OneWeb, new reusable vehicles); reusability's cost advantage is the central defense against that capital inflow.

• Relevant in 10 years / recurrence. Satellite connectivity (subscription) and launch are structural needs for the next decade; Starlink already operates with real, growing revenue on a base of 10.3 million subscribers.
• Competitive position / cost. More than 80% of the world's mass to orbit and the clear leader in low-earth-orbit satellite broadband; no competitor today matches its cost or its launch cadence.
• Pricing power. Limited on the consumer side: Starlink's ARPU declines by design (US$99 to US$81/month) as international penetration expands; the real advantage lies on the cost side, not on price.
• Operating leverage. High in Starlink once the constellation is deployed (63% EBITDA margin), but the group as a whole doesn't show it yet: deployment capex (Starship, AI compute) exceeds operating cash flow.
• Supply-side / capital cycle. The sector attracts aggressive capital (Amazon's Kuiper, OneWeb, new reusable vehicles); reusability's cost advantage is the defense, but competition is already on the way.

Not all debt is equal: only the structural needs refinancing; the rest is operational (self-liquidating).

Structural debt is what is exposed to the contraction phase of the cycle; operational debt (leases, matched funding) self-liquidates with the business.

• ✓Leverage (net debt / EBITDA)Net cash $61.6 bn
• !Interest coverage (EBIT / interest)EBIT ≤ 0 vs interest $1.2 bn
• !Liquidity (current ratio)1.33×
• –Cash quality (CFROIC vs ROIC)ROIC ≤ 0 (see value creation)
• !Value creation (ROIC − 10% bar)-13pp
• !Malinvestment test (capex vs incremental ROIC)Strong investment mode 3.1x
• –Float / working capitalNeutral WC
• –Dilution (SBC % of revenue + shares)no data

A traffic-light interpreted by the method (not generic): float (negative WC) adds up, capex is judged by incremental ROIC (malinvestment test), and a lender is not subjected to corporate solvency. The (i) shows the derivation of each number.

• Cash burn / dependence on financing. Capex (US$42.2bn) more than quadruples adjusted EBITDA (US$8.3bn); deployment is funded with the June offering's surplus and, once that surplus is exhausted, with continued market access.
• Debt and its structure. US$38.4bn of debt against US$100.0bn of cash and investments: the net position is a creditor of US$61.6bn after the June offering and notes, which repaid the bridge loan. The balance-sheet risk stopped being the maturity wall and became the burn rate.
• Short-term liquidity. Short-term cash and investments of US$100.0bn after the June offering: they cover operations and roughly three years of the capex plan at the trailing-twelve-month pace, but not the full multi-year deployment unless Connectivity and compute mature first.
• Access to capital. The IPO (Jun-2026) broadened access to equity markets; demand for the offering suggests financing isn't the constraint today — the risk is that it closes in a market downturn.

Who owns the shares — the alignment and whether there is a controlling shareholder.

• Capital allocation. Reinvests 100% of capital into the constellation, into Starship, and into AI compute; no dividend or buyback. Consolidated ROIC is negative today from the investment phase (-3.0%) — the pending test is whether the incremental return (~12%) holds above the cost of capital as it matures.
• Alignment / skin in the game. As high as it gets: Musk is founder, largest shareholder (~42% of equity) and controls ~82% of the vote via Class B — unilateral control is also the biggest corporate governance risk.
• Integrity / communication. Recently public company (IPO Jun-2026), with no track record of sustained communication as a listed issuer; the dual-class structure concentrates control with the founder, and arbitration clauses with class-action waivers limit minority shareholder recourse — governance traits typical of a founder-controlled company.
• Technical execution. Unmatched in the industry: Falcon 9's reusability and Starship's development underpin the cost moat; operating execution is the team's clearest strength.

• The price ($163, ~US$2.05 trillion market cap) requires all three pieces to execute simultaneously and flawlessly: Starlink sustaining its subscriber pace for years, Starship reaching full payload operations and continuing to lower cost per kilogram, and xAI converting contracted compute (~US$26bn/year) into a profitable position against better-funded rivals (OpenAI, Anthropic, Google).
• The entry multiple on sales (110×) is far above that of any comparable in infrastructure, telecommunications or software; it only holds if the whole compounds without pause for years and compresses to 49× over five years.
• The sum of the parts by piece — the method a business with negative consolidated FCF requires — yields an operating value well below the price in all three scenarios: even the bull case (~US$1.65 trillion) falls short of the ~US$2.05 trillion market cap.
• Mars, the lunar economy, and orbital data centers — the genuinely speculative bets — are excluded from the base case for not being quantifiable; even adding them informally doesn't close the gap to the current price.

There is no identifiable source of a discount. There's no shortage of buyers: the stock trades above the IPO offering price (US$135, Jun-12-2026) and market interest in the group is high. Nor are there forced sellers: it's a recent offering with a 366-day lock-up on founder shares, so there's no ongoing position unwind. The price already prices in successful execution of Starlink, Starship, and xAI all at once, and leaves out Mars, the lunar economy, and orbital data centers as unpaid upside. The verdict is Overvalued: quality businesses, bought with no margin of safety.

The annual return (CAGR at 5 years) in each scenario, with the total period return below — the margin of safety made visual: upside range wide, downside range narrow.

Even in the bear scenario, the return holds at -33%/year (-87% total): the margin of safety protects the downside. The bull (-7%/year, -29% total) exceeds it comfortably — a favorable asymmetry, with a narrow downside range and a wide upside range.

• Cash burn. Capex of US$42.2bn against consolidated free cash flow of −US$32.3bn; deployment depends on the surplus raised lasting until Connectivity and compute mature.
• Debt and burn rate. US$38.4bn of debt, with no material maturities before July 2031 per the filing.
• xAI competes in a contested market. Operating result of −US$6.4bn, competing with OpenAI, Anthropic, and Google for capital and talent.
• Starship execution. Still in testing (flight 12); central to the next cost step-down and to Starlink V3.
• Single-person dependence. Musk holds ~82% of the vote (Class B) and splits his attention across several companies; no real corporate-governance check.
• Regulation / spectrum. Exposure to the FCC and to spectrum disputes (e.g. EchoStar); may limit Starlink's deployment.
• Immediate liquidity. The US$100.0bn of cash and investments gives roughly three years of headroom at the current burn rate, a window in which deployment has to start self-funding.
• Price with no margin of safety. At a ~US$2.05 trillion market cap, the price already discounts successful execution of the group. Overvalued.

Each thinker's analytical framework applied to our data.

• Buffett / Graham Quality + margin of safety

  Fails the quality gate: ROIC -3% does not clear the 10% bar.

• Peter Lynch Growth at a reasonable price (GARP)

  A growth play growing 20% at a multiple/growth of 12.6 → expensive for its growth.

• Joel Greenblatt Cheap and high-return (Magic Formula)

  ROIC -3%; earnings yield not computable (EBIT or EV not positive).

• Howard Marks Perception vs reality + cycle

  The price discounts 65% vs our 20%: priced for perfection, no favorable mispricing.

• Seth Klarman Capital protection (bear scenario)

  Bear-scenario floor -33%/yr over 5y (material loss) → risk of permanent capital loss.

• Pat Dorsey Moat strength (Five Rules)

  A wide moat, widening; sources: cost advantage, efficient scale, intangibles, switching costs → passes the Five Rules.

• Aswath Damodaran Expectations implied by the price

  The price demands 65% growth, far above our 20% — heroic assumptions.